Content of the Adverse Action Notice

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Question:

If we deny a mortgage loan because the collateral is not acceptable for a second lien, does the credit bureau information need to be included?

Answer:

If the reason for denial does not involve the use of the credit report, the FCRA notice information should not be checked and the applicant is not entitled to a free credit report based on this notice. The reasoning is that derogatory information may be incorrect and the applicant needs to see it so he/she can correct it. There wasn't any credit report information that related to your decision, so this is moot.

First published on BankersOnline.com 1/17/05